Better World Books
12 Pages Posted: 7 Apr 2010
Abstract
Appropriate for courses in entrepreneurship and managing a small business. The case follows the evolution of a small business and its founders as they face the challenges of growth. An experienced CEO from outside is brought in to scale the business and deal with the issues regarding the business model, production, and distribution while striving to retain the company's core values as a for-profit company with a social mission.
Excerpt
UVA-ENT-0146
January 20, 2010
BETTER WORLD BOOKS
Better World Books (BWB), headquartered in Mishawaka, Indiana, was a privately held Internet book retail business with a mission to fund literacy initiatives around the globe. It was the brainchild of Xavier Helgesen, Chris “Kreece” Fuchs, and Jeff Kurtzman, three 2001 graduates of the University of Notre Dame who came up with the idea of selling books online after graduation. What started as an effort to make some extra money while also helping out a local nonprofit evolved into a “self-sustaining, triple-bottom-line company,” launched in 2003, that created social, economic, and environmental value for all stakeholders.
The company acquired its growing inventory of used books from two primary sources: the Campus Collection program and the Library Discards and Donations program, working with more than 1,600 college campuses and about 1,000 libraries nationwide. BWB sold the books through a variety of established online marketplaces such as Amazon and eBay and its retail site, betterworldbooks.com. Every order was shipped carbon neutral with offsets from Carbonfund.org. The company donated 7% to 10% of its revenues to various global literacy initiatives, partnering with Books for Africa, National Center for Family Literacy, Room to Read, Worldfund, and Invisible Children.
After developing the business for the first two years, the founders got a Small Business Administration-backed credit line in late 2004. In April 2008, the start-up raised $ 4.05 million in growth capital—$ 2 million from 18 private individuals and $ 2.05 million from its first institutional investor, Good Capital, a San-Francisco-based investment manager of the Social Enterprise Expansion Fund. After David Murphy came on board as president and CEO in August 2004, the company experienced triple-digit revenue growth that topped $ 30 million in fiscal year 2009.
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Keywords: Scaling, growing a business, entrepreneurs' changing roles social entrepreneurship, core competencies
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